The Chase Sapphire Reserve gets more exclusive — I’m not sure that’s a good thing

The Chase Sapphire Reserve® card used to be for people who wanted champagne travel on a beer budget — like middle-class Americans, many in their 20s and 30s, who enjoy traveling and dining out and desire a taste of luxury without spending too much. But after its latest refresh, the card is now slanted much more towards those who are actually rich, not just everyday people who want to travel as if they were rich.

Looking back at the original Sapphire Reserve

When the Sapphire Reserve first came out in 2016, it revolutionized the travel credit cards landscape. The card was an instant success, especially among millennials who had previously been reluctant to sign up for credit cards due to fears about adding credit card debt to their considerable student debt burdens. The New York Times dubbed its launch “the world’s first viral credit card.”

The Sapphire Reserve proved that millennials did want credit cards, they just didn’t want their parents’ credit cards. Chase tapped into millennials’ love of experiences, touting a slew of travel and dining benefits, including privileged access to swanky airport lounges and the ability to skip airport security lines, among many other perks, such as:

• 10X points on hotel stays, car rentals and Chase Dining purchases through Chase Travel℠ (after earning your $300 travel credit)
• 5X points on flights through Chase Travel℠ (after earning your $300 travel credit)
• 3X points on dining and general travel purchases (after earning your $300 travel credit)
• 1X points on all other purchases

These rates have been updated to:

• 8X points on travel, including flights, hotels and car rentals, booked through Chase Travel℠ (after earning your $300 travel credit)
• 4X points on flights and hotels booked directly (after earning your $300 travel credit)
• 3X points per dollar on dining
• 1X points on all other purchases

The “plunk factor” of a hefty metal card was another selling point — so much so that soon after the launch, Chase temporarily ran out of the special materials the card was printed on because the demand was so high.

At first, the Sapphire Reserve had a $450 annual fee, but that was effectively just $150 after the generous $300 travel credit. It essentially erases the first $300 in travel spending a cardholder does each year, whether that’s plane tickets or hotel stays or even everyday expenses such as parking and tolls. The Global Entry or TSA PreCheck fee waiver was worth close to another $100, so the first-generation Sapphire Reserve felt virtually free.

Two annual fee hikes later, it doesn’t feel that way anymore. The new $795 annual fee makes a louder thud than the 19.6 grams of metal the card is printed on. The Sapphire Reserve still offers considerable value for the right person, but it caters to a more niche audience these days. Most people can’t or won’t spend that much just for the privilege of using a credit card, even if it comes with a long list of potential sweeteners.

This isn’t champagne travel on a beer budget anymore. It’s champagne travel on a caviar budget.

The new Sapphire Reserve benefits

Chase proclaims that the card now offers more than $2,700 in annual value. For example:

• The $300 travel credit is still in effect
• The Global Entry/TSA PreCheck fee waiver is still in effect (NEXUS was added to the list a few years ago; Chase reimburses up to $120 in membership fees for those programs every four years)
• There’s a new $300 annual dining credit (doled out in $150 installments every six months) for Sapphire Reserve Exclusive Tables, a curated list of hundreds of popular high-end restaurants
• There’s also a new $500 annual credit (two $250 semi-annual installments) that can be used at hotels participating in “The Edit,” Chase’s luxury hotel and resort collection
• Complimentary annual subscriptions to Apple TV+ and Apple Music (valued at $250) have been added
• $300 in annual StubHub and viagogo credits (two semi-annual installments of $150) are now available
• Cardholders now get $120 in yearly Lyft credits (up to $10 per month)
• $300 in DoorDash promotions (up to $25 per month, which includes a $5 restaurant credit and two $10 credits for groceries, electronics and/or beauty orders) are now in effect, along with a complimentary DashPass membership worth $120 per year
• Up to $120 ($10 per month) is now credited each year toward Peloton memberships

Has the Sapphire Reserve just become a high-end coupon book?

That’s a long list of potential benefits, and for the right person, the Sapphire Reserve offers a ton of value. But I’m not a big fan of the “couponization” of high-end credit cards (The Platinum Card from American Express is often accused of this as well). The fact that these credits are doled out in installments, rather than all at once, undermines their value. This is similar to receiving a gift card. It might not be to a store you particularly like, and even if it is, you usually end up spending too much or too little.

Probably too much when it comes to properties participating in “The Edit.” These are the kinds of hotels that tend to cost upwards of $700 per night, and to qualify for the Sapphire Reserve’s $250 semi-annual credits, you need to pre-pay for at least a two-night visit. While it may be nice to “save” $250 on a stay, did you save $250 or did you spend an additional $1,000+?

To be fair, there are other related benefits such as free breakfast and a $100 property credit, but this proves my point that the offer no longer targets the masses. There’s a certain type of (moneyed) person who’s staying at these sorts of hotels costing $700, $800 or $1,000 per night. The credits usually don’t come close to offsetting the total cost.

How rewards valuations are changing

It’s also becoming harder and more expensive to use your rewards points. Previously, the Sapphire Reserve offered the ability to redeem Ultimate Rewards points at a fixed valuation of 1.5 cents per point for any travel (a 50 percent bonus compared with the standard cash back ratio of 1 cent per point). That’s going away and being replaced by “Points Boost,” a list of curated offers that sometimes value points as much as 2 cents apiece.

That’s great if you can find the right fit, but many redemptions will fall to just 1 cent per point. The transfer partners are still in effect, which is likely the best way for most cardholders to extract value from their points, although it’s more complicated and not always ideal for travelers on a fixed schedule (like I am, with two kids in school).

Take a deeper look at some of the Sapphire Reserve’s credits

The Sapphire Reserve dangles quite a few shiny new credits at cardholders in the hopes that they offset the steep new annual fee — do they?

I enjoy attending sporting events, so the Sapphire Reserve’s new StubHub credit could be worthwhile, but what if I find a better deal through the team’s website or a rival ticketing agency? Would it really be feasible for me to maximize $150 twice a year on this one platform that may or may not offer the best pricing and availability?

The DoorDash credit is similar. Would it save my family $25 per month or would it be something that we forget to use? Or would we end up spending, say, $50 each month just to “save” $25? We’re not routine DoorDash users, so we would have to adjust our habits, and that might not be optimal.

I would find the credits much more valuable if they could be used all at once, rather than in drips and drabs. For example, if the card were to reimburse the first $300 I spend on DoorDash each year, that would be a heck of a lot more valuable (and easier) than the 36 different $5 or $10 credits cardholders now receive. Or if the Lyft credit were a lump sum, that $120 could pay for a ride to or from the airport. But 12 different $10 installments aren’t nearly as appealing.

Is the new Sapphire Reserve worth it? Not for my family.

Regular readers of my column know that I’m a big proponent of cash back credit cards. Cash back is simple and straightforward, and I enjoy getting money back from my family’s many routine expenses (groceries, gas, etc.). I travel some, but it’s not a passion of mine, and I generally look to avoid annual fees. I admit I’m far from the poster boy for a luxury travel card such as the Sapphire Reserve.

But even trying to play this through in my mind, to see if a family like mine could potentially benefit from a card like the Sapphire Reserve, I can’t get there. The idea of relaxing in an airport lounge is enticing, but with two young kids in tow, that’s not the best fit for our current lifestyle. To even get our family of four into the lounges, my wife or I would need to spring for an authorized user card (an additional $195 per year, on top of the $795 for a primary cardholder).

The bottom line

Again, some people will find the new Sapphire Reserve card incredibly rewarding. I don’t believe it’s the right fit for me, and that’s fine. But I also suspect it’s not the right fit for most people — and that’s what has changed. Even though the list of benefits was shorter, when this card charged $450 per year (minus the $300 travel credit and $100 or so for Global Entry or TSA PreCheck), I recommended it to almost everyone. Why not, right? Even if you flew once or twice a year, you could skip the security line and stock up on free food and drinks in the lounge and feel like you came out ahead. If you traveled more, you came out way ahead.

You can still come out ahead with the Sapphire Reserve. But you need to work harder to do so. That’s a lot of monthly and semi-annual credits to remember to use, and a lot of those activities are going to end up costing you way more than you earn back in credits. I suspect this is by design — for the bank’s profits but also for the air of exclusivity. Because if everyone is special, then no one is.

For instance, across the credit card industry, there has been a backlash against the proliferation of cards offering access to lounges that don’t feel as exclusive as they did in the past. To Chase’s credit, they have more generous lounge guest policies than American Express and Capital One, both of which have pared back guest access to lounges in an effort to ease overcrowding.

But many of the Sapphire Reserve card’s recent changes lean so hard into luxury travel and dining that they have become out of reach for most people. That promotes an air of exclusivity, but it comes at a price. This isn’t champagne travel on a beer budget anymore. It’s champagne travel on a caviar budget.

Have a question about credit cards? E-mail me at ted.rossman@bankrate.com and I’d be happy to help.